AG advisory creates new considerations for charter school governance and operations

9 Jan
0

By Kathryn Meola, CSBA General Counsel 

California Attorney General Xavier Becerra has issued an advisory opinion (No. 11-201, dated December 26, 2018) concluding that charter schools and their governing bodies are subject to the Ralph M. Brown Act and the California Public Records Act. The Attorney General also concluded that the governing bodies of charter schools are subject to both Government Code section 1090, which prohibits conflicts of interest in public contracts, and the Political Reform Act of 1974. Finally, the books and records of a charter school authorized by a school district’s board or a county office of education’s board are subject to review and inspection by a grand jury, whereas charter schools authorized by a State Board of Education are not subject to the same review or inspection.

A majority of charter schools already regularly comply with open meetings and public records rules, and advocates for charter schools have strongly opposed legally forcing charter schools to comply with the Brown Act and the Public Records Act. Others have argued that entities which operate with public funds should be held to a higher standard with open access of information and protections against conflicts of interest.

Finding that “[t]he public has a right to expect transparency from charter schools because they are licensed and paid by the state to participate in the core function of educating California’s children,” the Attorney General concluded that a charter school is “a school district or other local public agency within the meaning of the Brown Act and the Public Records Act and therefore is subject to those laws.” The Brown Act was enacted in 1953 and “guarantees the public’s right to attend the meetings of public agencies and thus curbs misuse of the democratic process.” The Public Records Act was enacted in 1968 to “facilitate the public’s right to monitor government activities on the principal that access to information concerning the conduct of the people’s business is a fundamental and necessary right of every person” in California. The Attorney General’s opinion thus ensures that charter schools and their governing bodies have open meetings with appropriate notices and that records are subject to inspection by citizens and the press.

The Political Reform Act of 1974 was created to effectuate the principle that public officials, whether elected or appointed, should perform their duties in an impartial manner, free from any bias caused by their own financial interests or those of the people who have supported them. In 1998, the Fair Political Practices Commission, the agency responsible for enforcing the conflict-of-interest provisions of the Political Reform Act, issued an advice letter concluding that the board members of a charter school’s nonprofit corporation were subject to the Political Reform Act’s conflict of interest provisions, and the Attorney General now concurs with that conclusion.

Public school districts and county offices of education should review new charter petitions and renewals with this guidance in mind.

A more momentous change to the governance and operations of charter schools is the Attorney General’s opinion that Government Code section 1090 applies to a charter school’s governing board. Section 1090 broadly prohibits conflicts of interest in public contracts and generally forbids public officials from participating in making government contracts in which they have a prohibited interest. “The purpose of the rule is to ensure that ‘every public officer be guided solely by the public interest, rather than personal interest, when dealing with contracts in an official capacity.’” Applying Government Code section 1090 to the governing board of a charter school will have implications for whether board members may enter into a loan and/or lease agreement with the charter school which they serve, and whether board members already in that position may continue to serve in that role. This is intended to eliminate actual and potential conflicts of interest that might impair the governing body from discharging their fiduciary duties with undivided loyalty and allegiance to the charter schools they are obligated to serve.

Finally, the Attorney General looked at whether a charter school’s books or records are subject to review and inspection by a grand jury. Previous opinions have concluded that the books and records of a traditional public school district are subject to grand jury inspection, and pursuant to the supervisorial oversight of a local school district or county board of education, the books and records of a charter school authorized by one of those bodies would be similarly subject to grand jury review. However, the books and records of a charter school authorized by the State Board of Education would be outside the scope of the grand jury and thus not subject to grand jury review.

Attorney General opinions are not binding legal authority; however, they are given considerable weight by the courts, especially when the Attorney General regularly advises agencies on such matters, as is the case here, and the opinion is consistent with other authority and guidance from analogous regulatory agencies. Public school districts and county offices of education should review new charter petitions and renewals with this guidance in mind, and as part of the local agency’s oversight responsibilities.

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